A considerable number of home buyers require a mortgage to realize their dream of home ownership. However, this does not imply that lenders easily give them out to anyone who asks. As a buyer, you should know the process and requirements that must be met to get the mortgage you’ll need.
Therefore, before you set foot in a home, ensure you are familiar with the following steps to get a mortgage in order to secure financing smoothly.
1. Prepare to Meet with a Lender
Before you take all of the steps to get a mortgage, you’ll need to prepare your personal financial documents that a lender will need. Preparing W2s, tax returns, income statements, identification documents and more will help you make the most of your first meeting with a lender.
2. Mortgage Pre-Approval
Getting pre-approved is one of the goals of meeting with a lender. During this step, the lender evaluates your credit and verifies your employment and financial data to ascertain your eligibility for a mortgage. A pre-approval reinforces your position to make an offer whenever you come across property of your liking. Sellers are more likely to transact with pre-approved buyers, who have already proven they have sufficient financial back up to acquire a home.
3. Home Appraisal
Following the acquisition of a home, most lenders will want to check out what you are purchasing with their money. Basically, a home appraiser analyses the market value of the house relative to other homes within the same category. This procedure is much similar to what you and your real estate agent does when figuring out how much to offer for a home. In most cases the appraiser’s price equates to your own, which is a good thing.
4. Clear the Property Title and Close the Deal
Being a rightful owner of a home is marked by being in possession of the property title. On the other hand, since your lender wants proof, it will pay a title company to look through public records for any title defects regarding the property. Upon clearance of the title you can now close the deal.
Although the steps to get a mortgage may appear time-consuming and unnecessary, rest assured its aim is to protect all parties involved from making costly faults. For more information about the steps to getting a mortgage and first time home buying, download our eBook now!